* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Virtual organization
Survey
Document related concepts
Project management wikipedia , lookup
Workers' self-management wikipedia , lookup
Public service motivation wikipedia , lookup
Operations research wikipedia , lookup
Operations management wikipedia , lookup
Strategic management wikipedia , lookup
Sustainable management wikipedia , lookup
Environmental resource management wikipedia , lookup
Ecosystem-based management wikipedia , lookup
International Council of Management Consulting Institutes wikipedia , lookup
Management consulting wikipedia , lookup
High-commitment management wikipedia , lookup
Investment management wikipedia , lookup
Transcript
Managing Contemporary Organization UNIT IV Management Concepts 1 UNIT IV • Defining organization structure- Division of work, Departmentalization, Hierarchy (Chain of command and Span of Control), Co-ordination • Authority, Responsibility & Delegation • Centralization and Decentralization • Common organizational Designs- Traditional Designs (Simple, Functional, divisional), Contemporary Designs (Team structures, Matrix/project structures, boundary less organization) Management Concepts 2 What Is Organizing? • Organizing – Arranging the activities of the enterprise in such a way that they systematically contribute to the enterprise’s goals. Management Concepts 3 Organization • Common parlance --- organization ---institution - formal arrangement of work among members with clear identification of authority and responsibility so that organizational goals are achieved optimally Management Concepts 4 Organizing • Structure • Defines vertical and Horizontal relationships • Structure of network of relationships • Process • Defines Relationships amongst people in such a way that organizational goals are achieved efficiently • Differentiation and Integration Management Concepts 5 Nature of organization • • • • • • • Structure of relationships Managerial functions Ongoing process Encourages teamwork Goal oriented Adaptive in change Situational Management Concepts 6 Process of organizing • • • • • • Determination of objectives Division of activities Grouping of activities Defining authority and responsibility Coordination of activities Reviewing and reorganizing Management Concepts 7 Importance • • • • • • • Facilitates administration Growth and diversification Creates synergies Establishes accountability Facilitates communication Facilitates teamwork Facilitates control Management Concepts 8 Depicting the Organization • Organization Chart – A chart that shows the structure of the organization including the title of each manager’s position and, by means of connecting lines, who is accountable to whom and who has authority for each area Management Concepts 9 Structure Variables • Principles • Departmentalization – Chain of command – Span of control – Authority – Power – Responsibility Management Concepts – Functional – Divisional • • • • Product Customer Geographic Process 10 Organization Design and Structure • Organization design – A process in which managers develop or change their organization’s structure • Work specialization – A component of organization structure that involves having each discrete step of a job done by a different individual rather than having one individual do the whole job Management Concepts 11 Concept of Organization Structure Structure as recurring activities Structure as an influence on behavior Management Concepts 12 Organization Structure • Three Components – Formal reporting relationships – Grouping of people and departments – Design of systems to ensure effective communication, coordination, and integration Management Concepts 13 What is an Organizational Structure • The organizational structure defines the organization's hierarchy of people and departments as well as how information flows within the organization. • The organizational structure determines how and when information is distributed as well as who makes what decisions based on the information available. • How job tasks are formally divided, grouped and coordinated. Management Concepts 14 Organizational structure • Organizational structure refers to the levels of management and division of responsibilities within a business, which could be presented in an organizational chart. Management Concepts 15 The importance of the Organizational Structure • The Organizational Structure is important because it ensures that there is an efficient operation of a business and it clearly defines its workers and their functions. • The organizational structure also helps define the hierarchy and the chain of command. Management Concepts 16 The Concept of Organization Structure Structure helps influence behavior and relationships of jobs and functions Structure defines recurring activities and processes. Structure provides a purposeful and goaloriented behavior. Management Concepts 17 Division of labor • Division of labor and patterns of coordination, communication, workflow, and formal power that direct organizational activities. • Division of labor –Subdivision of work into separate jobs assigned to different people –Potentially increases work efficiency –Necessary as company grows and work becomes more complex Management Concepts 18 Division of Labor • Division of labor – concerns the extent to which jobs are specialized • It is the process of dividing work into relatively specialized jobs to achieve advantages of specialization Management Concepts 19 Division of Labor Occurs in Three Different Ways: 1. Personal specialties – e.g., accountants, software engineers, graphic designers, scientists, etc. 2. Natural sequence of work – e.g., dividing work in a manufacturing plant into fabricating and assembly (horizontal specialization) 3. Vertical plane – e.g., hierarchy of authority from lowest-level manager to highest-level manager Management Concepts 20 Organizational Structure: Control • Chain of command – The management principle that no person should report to more than one boss • Span of control – The number of subordinates a manager can direct efficiently and effectively • Authority – The rights inherent in a managerial position to give orders and expect them to be obeyed • Responsibility – An obligation to perform assigned activities • Power – An individual’s capacity to influence decisions Management Concepts 21 Chain of Command Management Concepts 22 Management Concepts 23 Tall And Flat Organizations, And The Span Of Control • Span of Control – The number of subordinates reporting directly to a supervisor. • Wide spans: larger number of direct reports. • Narrow spans: fewer number of direct reports. • Tall vs. Flat Organizations – Tall organizations: more management layers and more hierarchical controls. – Flat organizations: fewer management layer and decision making closer to the customer. Management Concepts 24 span of control • Number of people directly reporting to the next level – Assumes coordination through direct supervision • Wider span of control possible with other coordinating mechanisms present Management Concepts 25 Tall and Flat Organizations • Tall structures have many levels of authority and narrow spans of control. – As hierarchy levels increase, communication gets difficult creating delays in the time being taken to implement decisions. – Communications can also become distorted as it is repeated through the firm. – Can become expensive Management Concepts 26 Management Concepts 27 • Flat structures have fewer levels and wide spans of control. – Structure results in quick communications but can lead to overworked managers. Management Concepts 28 Management Concepts 29 Authority • Right to carry out the assigned tasks (responsibilities) • Power enjoyed by a person to influence his subordinates, to direct them to work. • Derived by the virtue of the position he holds in the organization Management Concepts 30 Types of Organizational Authority • Line authority – The position authority (given and defined by the organization) that entitles a manager to direct the work of operative employees • Staff authority – Positions that have some authority (e.g., organization policy enforcement) but that are created to support, assist, and advise the holders of line authority Management Concepts 31 Types of Power • • • • • • • • • • Legitimate Power based on one’s position in the formal hierarchy Coercive Power based on fear Reward Power based on the ability to distribute something that others value Expert Power based on one’s expertise, special skill, or knowledge Referent Power based on identification with a person who has resources or traits Management Concepts 32 • Authority • Formal rights of a person to issue orders and instructions to subordinates • Power • Ability of a person to issue orders and instructions to subordinates Management Concepts 33 Responsibility • The task entrusted by the manager to his subordinates. • Moral commitment to the work assigned Management Concepts 34 Departmentalization: Creating Departments • Departmentalization – The process through which an organization’s activities are grouped together and assigned to managers; the organization wide division of work. Management Concepts 35 Departmentalization • Functional – The grouping of activities by functions performed • Product – The grouping of activities by product produced • Customer – The grouping of activities by common customers • Geographic – The grouping of activities by territory • Process – The grouping of activities by work or customer flow Management Concepts 36 Mechanistic and Organic Organizations • Mechanistic organization – The bureaucracy; a structure that is high in specialization, formalization, and centralization • Organic organization – An adhocracy; a structure that is low in specialization, formalization, and centralization • Structure follows strategy Management Concepts 37 Organizational structure • Simple structure – An organization that is low in specialization and formalization but high in centralization • Functional structure – An organization in which similar and related occupational specialties are grouped together • Divisional structure – An organization made up of self-contained units Management Concepts 38 Organizational structure • Matrix structure – An organization in which specialists from functional departments are assigned to work on one or more projects led by a project manager • Team-based structure – An organization that consists entirely of work groups or teams • Boundary less organization – An organization that is not defined or limited by boundaries or categories imposed by traditional structures Management Concepts 39 Functional Structure – An organizational structure composed of all the departments that an organization requires to produce its goods or services Management Concepts 40 Advantages – Encourages learning from others doing similar jobs. – Easy for managers to monitor and evaluate workers. – Allows managers to create the set of functions they need in order to scan and monitor the competitive environment Management Concepts 41 Management Concepts 42 Divisional Structure – Managers create a series of business units to produce a specific kind of product for a specific kind of customer Management Concepts 43 Management Concepts 44 • Product Structure – Managers place each distinct product line or business in its own self-contained division – Divisional managers have the responsibility for devising an appropriate business-level strategy to allow the division to compete effectively in its industry Management Concepts 45 • Allows functional managers to specialize in one product area • Division managers become experts in their area • Removes need for direct supervision of division by corporate managers • Divisional management improves the use of resources Management Concepts 46 • Geographic Structure – Divisions are broken down by geographic location • Global geographic structure – Managers locate different divisions in each of the world regions where the organization operates. – Generally, occurs when managers are pursuing a multi-domestic strategy Management Concepts 47 • Global Product Structure – Each product division takes responsibility for deciding where to manufacture its products and how to market them in foreign countries worldwide Management Concepts 48 Management Concepts 49 • Market Structure – Groups divisions according to the particular kinds of customers they serve – Allows managers to be responsive to the needs of their customers and act flexibly in making decisions in response to customers’ changing needs Management Concepts 50 • Product Team Structure – Cross-functional team is composed of a group of managers from different departments working together to perform organizational tasks. Management Concepts 51 Management Concepts 52 Creating Matrix Organizations • Matrix Organization – An organization structure in which employees are permanently attached to one department but also simultaneously have ongoing assignments in which they report to project, customer, product, or geographic unit heads. Management Concepts 53 Management Concepts 54 Matrix Organization Departmentalization Management Concepts 55 Matrix Organizations Advantages • Access to expertise. • Stability of permanent department assignments for employees. • Allows for focus on specific projects, products, or customers. Disadvantages • Confusion of command. • Power struggles and conflicts. • Lost time in coordinating. • Excess overhead for managing matrix functions. Management Concepts 56 Abolishing Organizational Boundaries • Boundary less Organization – An organization in which management strips away the “walls” which typically separate organizational functions and hierarchical levels, through the widespread use of teams, networks, and similar structural mechanisms. Management Concepts 57 Virtual Organizations • Virtual organization – a collection of geographically distributed, functionally and/or culturally diverse aggregations of individuals that is linked by electronic forms of communication • Assembled and disassembled according to needs Management Concepts 58 Delegation of Authority • Managers decide how much authority should be delegated to each job and to each jobholder • Delegation of authority – process of distributing authority downward in an organization Management Concepts 59 Reasons to Decentralize Authority 1. Relatively high delegation of authority encourages the development of professional managers 2. High delegation of authority can lead to a competitive climate within the organization 3. Managers who have relatively high authority can exercise more autonomy, and thus satisfy their desires to participate in problem solving Management Concepts 60 Reasons to Centralize Authority (1 of 2) 1. Managers must be trained to make the decisions that go with delegated authority 2. Many managers are accustomed to making decisions and resist delegating authority to their subordinates Management Concepts 61 Reasons to Centralize Authority (2 of 2) 3. Administrative costs are incurred because new control systems must be developed to provide top management with information about the effects of subordinates’ decisions 4. Decentralization means duplication of functions Management Concepts 62 Centralization and Decentralization • Centralization – A function of how much decision-making authority is pushed down to lower levels in an organization; the more centralized an organization, the higher the level at which decisions are made • Decentralization – The pushing down of decision-making authority to the lowest levels of an organization Management Concepts 63 Centralization Formal decision making authority is held by a few people, usually at the top • Organizational crises • Management desire for control • Increase consistency, reduce costs Decision making authority is dispersed throughout the organization • Complexity — size, diversity • Desire for empowerment Decentralization Management Concepts 64 Decentralize? • Decentralized Organization – Organizational authority for most departmental decisions is delegated to the department heads. – Control for major companywide decisions is maintained at the headquarters office. • Decentralization Rules: – Decentralize decisions that affect only one division or area and that would take a long time for upper management to make. – Centralize decisions that could adversely affect the entire firm and that upper management can fairly quickly and easily. Management Concepts 65 DECENTRALIZATION: BENEFITS WHEN LOW AND WHEN HIGH Low Decentralization (High centralization) High decentralization (low centralization) Eliminates the additional responsibility not desired by people performing routine jobs Can eliminate levels of management, making a leaner organization Permits crucial decisions to be made by individuals who have the “big picture” Promotes greater opportunities for decisions to be made by people closest to problems Management Concepts 66 Organizing cont… NB: The Importance of structure: “Good organization structure does not by itself produce good performance but poor organization structure makes good performance impossible no matter how good the individual managers may be”. (Drucker, 1989) Management Concepts 67 L&T organizational structure 68